the white elephant - portfolio selection and alignment
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The White Elephant
Mohammed KhaiataFriday 25th October 2013
Three Gorges Dam - China
• Cost: US$26 billion• Largest hydroelectric dam in the world• 18 years to build; 1994 till 2012• Height 181 m, base width 115 m, length 2,335 m• Caused 1.4 million people to be relocated• Caused the worst drought in 50 years• 1300+ Chinese heritage sites were submerged• At risk of catastrophic failure (great earthquake)
Ciudad Real Central Airport
• €1.1bn Cost• Promised 6000 new jobs • Promised boom for the local economy• Closed in April 2012 after only four years of
operations
Castellón–Costa Azahar Airport - Spain
• €150 million Cost• Got delayed for several years• Declared "open" officially in March 2011
despite:– No airlines signed up to land there, nor – Government approval to operate
• Flights were due to begin on April 2012• As of June 2013, there have been none
Agenda
• Alignment Paradigm• Selection Model• Project Portfolio Process• Open Discussion
Alignment Paradigm
Corporate Strategy
McKinsey’s 7S Model
Strategic Alignment Maturity Model
IT Strategy
Business Strategy
IT Operations
Business Operations
Business Impact
The Case of ERP Implementation
Selection Model
Selection Model
• Mathematical• Comparative– Cost / Benefit Analysis– Scoring Models– Economic Models– Discounted Cash Flow– IRR, NPV, …
Selection Model
• Know what you want– Do your homework • Define your scope, budget, timeline, and constraints
– Survey the market– Know the risks• Product Limitations• Total Cost of Ownership TCO• Myths of Vendors
Selection Model - Example
Selection Model - Example
• Client: Our requirement...this is something big, you know.... we need an elephant…
• Vendor: … but why don’t you adjust with a buffalo, it is also big and black?
• Client: No, we need only elephant, let me explain our current process is … (1 hour …)
• Vendor: Fine, I understand. But our product supports only buffalo…
Selection Model - Example
• Client: But we require only elephant!• Vendor: Ok... Let me see if I can customize• Signed SOW: Client wants:– A big black four legged animal– Long tail– Less hair– Having trunk is mandatory.
Selection Model - Example
• Specifications:– Have One Trunk– Have Four Legs– Should Carry Load for Both Passenger and Cargo– Black in Color– Should be Herbivorous
Selection Model - Example
• Delivery Team:– All features are supported in base product buffalo– For trunk alone a separate customization is done.– Added Value: Delivers Milk
Selection Model - Example
Selection Model - Example
• Scoring Models Used• Survey the market – Benchmark:
The Case in .
Project Portfolio Process
Project Portfolio Process
• Balancing Dimensions
Project Portfolio Process
The Case in .
• Four phases• Splitting Modules and licensing• HR then other functions• Pilot then rollout• Engaging Internal team with SI• Sponsorship
Example of Full Lifecycle
• How The Customer Explained it
Example of Full Lifecycle
• How the project leader understood it
Example of Full Lifecycle
• How the analyst designed it
Example of Full Lifecycle
• How the programmer wrote it
Example of Full Lifecycle
• What the beta testers received
Example of Full Lifecycle
• How the business consultant described it
Example of Full Lifecycle
• How the project was documented
Example of Full Lifecycle
• What operations installed
Example of Full Lifecycle
• How the customer was billed
Example of Full Lifecycle
• How it was supported
Example of Full Lifecycle
• What marketing advertised
Example of Full Lifecycle
• When it was delivered
Example of Full Lifecycle
• What the digg effect can do to your site
Example of Full Lifecycle
• The disaster recovery plan
Example of Full Lifecycle
• What the customer really needed
Do You Really Know What You Want?
Open Discussion